1406587--3/5/2009--Forestar_Group_Inc.

related topics
{gas, price, oil}
{loan, real, estate}
{investment, property, distribution}
{interest, director, officer}
{personnel, key, retain}
{control, financial, internal}
{debt, indebtedness, cash}
{cost, regulation, environmental}
{condition, economic, financial}
Our activities are subject to environmental regulations and liabilities that could have a negative effect on our operating results. Our real estate development operations are currently concentrated in the major markets of Texas, and a significant portion of our undeveloped land holdings are concentrated in Georgia. As a result, our financial results are dependent on the economic growth and strength of those areas. If we are unable to retain or attract experienced management personnel, our business may be adversely affected. Our real estate development operations are increasingly dependent upon national, regional, and local homebuilders, as well as other strategic partners, who may have interests that differ from ours and may take actions that adversely affect us. Our customers may be unwilling or unable to meet lot takedown commitments due to liquidity limitations or slowing market conditions. Significant reductions in cash flow from slowing real estate, mineral resources or fiber resources market conditions could lead to higher levels of indebtedness, limiting our financial and operating flexibility. Debt within some of our ventures may not be renewed or may be difficult or more expensive to replace. Our lenders may be unable or unwilling to fund their commitments under our senior credit facility. The current turmoil in the credit markets could limit demand for our products, and affect the overall availability and cost of credit. Delays or failures by third parties to take expected actions could reduce our returns or cause us to incur losses on certain real estate development projects. We cannot control activities on oil or gas properties we do not operate. Volatile oil and gas prices could adversely affect our cash flows and results of operations. We have only a limited operating history as an independent, publicly-traded company upon which you can evaluate our performance, and accordingly, our prospects must be considered in light of the risks that any newly independent company encounters. Our historical financial information prior to 2008 is not necessarily indicative of our results as a separate company and, therefore, may not be reliable as an indicator of our future financial results.

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